Sauda Arabia has peaked, so fasten your seatbelts and get ready for a real rollercoaster ride.

I am only one.
I cannot do everything.
But still I can do something

In the likely event that IEA/EIA has to backtrack on their projections for possible supply growth, what happens?

Has anybody done detailed analysis, what would be estimated optimistic scenarios for increases in Iraq and African countries on the short-term, IF the security/political situation didn't hamper production?

I do not expect the security situation to improve miraculously.

This is a mere thought-game to think if there is still any significant short-term spare capacity outside KSA?

I understand the importance of KSA and super-giants in particular, but it'd be interesting to see a summary of possible capacity increases from USA's major oil importing region, which I believe is now Africa.

Why do we listen to anything that has "Information" and "Administration" in the title?
We have an agency that is going to 'wish' more production into existence, but we don't have an agency to demand less consumption.
If we bury our heads in the numbers, we can easily justify driving to work to analyze more numbers, since that is the paradigm. Maybe the OPEC countries are right, maybe they don't go far enough. Sometime, the monkey on our back is going to bite our head off. That head is the economy based on perceptions of perpetual growth.

Remember, its possible the answers to both the title questions.....

(Will OPEC increase supply in the 2nd half of 2007? Or has Ghawar peaked?)

...could be "no".

======and===============

sure, Saudi could be on some sort of bumpy plateau or near peak. Also, alot of what I read assumes..i spose as we all do..that the current governments-of-the-day will continue to hold. But somewhere along the line, the Saudi monarchy/gov't may (will?) fail and then who knows what will happen, i.e. the "above ground factors" that folks are talking about in Nigeria oil situation these days

Is their anyway to adjust the oil supply numbers for growth.
You would expect stocks to increase in the OECD countries because of simple demand growth. I'm not sure if this is a big factor or not.

Next I'd have to side with OPEC on this issue at least for now
given the high levels of stocks its tough to call for a increase now and they would have plenty of time to increase supply if stock draw downs become obvious. Or at least I assume they would. This leads to my next question how long does it take for us to go from well supplied to under supplied. One month two three given our current import rates.
I'd have to guess it takes several months for this to happen.

From your graph I'm guessing 3-4 months to go from over to under supplied so I would have to side with OPEC and say do nothing for several more months. I believe they said the would re-evaluate the situation in September which sounds about right.

Now the point that if nothing is done we will get price increases I think OPEC is shooting for a new firm floor price of 70+ before they release any oil if they can. So I don't think you will see them do a thing until the price is well above 70 and then we might be able to see what KSA can do but on the same hand they may do a short token increase based more on straining the fields and drawing down storage then come back and say they are comfortable at the new price. Overall I'd have to side with OPEC on this one.

This was posted by Dave Cohen over on EB and may shed a little light on this topic:

A paradigm shift
by Dave Cohen

Mr. McGuire: I want to say one word to you [about your future]. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
— from the movie The Graduate

In a recent personal communication sent to ASPO-USA, former Saudi Arabian exploration and production head Sadad Al-Husseini made the following statement.

There has been a paradigm shift in the energy world whereby oil producers are no longer inclined to rapidly exhaust their resource for the sake of accelerating the misuse of a precious and finite commodity. This sentiment prevails inside and outside of OPEC countries but has yet to be appreciated among the major energy consuming countries of the world.

Saudi Arabia's production declined 8% in 2006. This is a fact which requires interpretation, and there are two opposed views: they can't or they won't raise exports. Matt Simmons has doubts about current Saudi capacity, most prominently raised in his book Twilight in the Desert. At The Oil Drum, Stuart Staniford's analysis appears to buttress Simmons' position, but is hampered by a lack of current production data from Ghawar, which the Kingdom will not reveal. The "won't" position has gotten scant attention in the peak oil community. Al-Husseini's statement points to a fundamental reorganization of the world's future oil supply. Downstream investments in the Persian Gulf states lends support to his view that these producers will exert greater and greater control over their fossil fuel resources in the future.

The paradigm shift reflects the historical trend toward resource nationalism. IHS Energy's Pete Stark summarizes the change.

Considering that governments and NOCs control more than 80% of the world’s remaining oil reserves, are expanding and upgrading refineries and infrastructure, and are developing gas resources, the effect [of the shift] is considerable. But that has not always been the case. In the past, when oil prices were low, investments in exploration dropped, and governments were eager to create incentives to attract investments—including reducing tax rates and state participation, or providing royalty relief.

All that changed in 2003 when oil prices began to soar....

The core issue for the large consumer nations is how quickly resource holders will produce oil & gas to meet their burgeoning demand. The IEA and other OEDC representatives constantly call on OPEC — with ever greater acrimony and desperation — to increase production (graphic below, left). The key question, as energy economist Ferdinand Banks notes at EnergyPulse, is why should they?

On this topic I think it best to pay attention to something that Matthew Simmons of Simmons & Company – a Houston-based investment firm specializing in oil – once said: "Too many people are looking at OPEC through the rear-view mirror. There’s a resolve in their eyes never to go back to the days of cheap oil." Not just in OPEC’s eyes but in their investment policies, which make it clear that they feel that it is in their best interests to refrain from bringing too much additional oil to market. This is a good place to ask one of my favorite questions: would you if you were in their place? Accordingly, the optimal development strategy for a country like Saudi Arabia is to pay more attention to the refining of oil, and the production of petrochemicals.

A paradigm shift means that OPEC nations are determined to never see the low prices of the late 1990's ever again. The Call on OPEC? (published here, May 2, 2007) calls attention to the obvious fact that the OPEC nations will always act in their best economic interests. This conclusion would seem self-evident, except that the IEA apparently has not absorbed the lesson, as Al-Husseini says. Further to the point, there is no OPEC desired price band at the moment. It was also argued, based on some reasonable assumptions, that at the current OPEC Basket Price — $67.90 on June 18th — Kuwait, Saudi Arabia and other OPEC states are making as much money leaving some of their oil in the ground as they would if they were producing it, which would only lower the price.

This conclusion runs counter to James Hamilton's reasonable assertion, made in June, 2006, that Saudi production did not fit "the classic story of a monopolist cutting back production in order to raise the price." However, Hamilton also says "while I believe the Saudis are quite capable of letting output drift down in order to try to defend a price floor, wherever such a floor might be, it's not $70 a barrel." A year later, on June 15, 2007, the Brent price is $71.84, and has hovered around the $70/barrel mark for the past month, rising from low $50s since the beginning of the year. There is little evidence that current price level has stifled world oil demand, although that demand has been redistributed from the poor to the wealthy. (See Africa and Central America.) The desired price today is whatever OPEC thinks the market will bear, not the fair price of $60/barrel back in 2006. This is a dangerous game because the downward demand pressures on consumer economies created by even higher prices (about $80/barrel) could be severe.

Oil consumers expect Middle Eastern nations to invest heavily in upstream activities to keep the oil flowing. In fact, major investments are being made, in the downstream refining and petrochemical sectors. The numbers are staggering, as compared with upstream investments, according to Ali Al-Naimi.

Based on the outlook of growing demand for their oil and gas, by 2011 the countries of the Middle East will invest some $94 billion in their oil and gas upstream sectors, more than half of which will go to expand oil production capacity. This is in addition to more than $240 billion of investment in the mid and downstream oil and gas chains and petrochemicals...

Of the $70 billion Saudi Arabia is investing by 2012, only $18 billion is for upstream expansions. Nancy Yamaguchi's Middle East petroleum sector: growing in all directions (Petromin, March 2007) provides an overview of refinery expansions in the Middle East (graphic, left). Saudi Arabia has ambitious plans to create more refining capacity, including the Jubail and Yanpu export facilities.

The Middle East push into petrochemicals rivals the refining investments. Saudi Aramco has a joint venture with Japan’s Sumitomo Chemical to build a complex at Rabigh. The Gulf Cooperation Council (GCC) nations spent almost $70 billion in 2006, with Saudi Arabia leading the way at $44 billion (Gulf News).

The Persian Gulf states are expanding downstream capacity to meet rising internal consumption of refined products (see Yamaguchi), but that's only a small part of the story. Due to their substantial comparative advantage, refining and petrochemicals is where the money is. Oil and condensate can be provided for refining at below market costs. Saudi Arabia can refine its own heavy, sour (sulfur-laden) crude. Cheaply produced naphtha or natural gas or gas liquids can be used as a petrochemical feedstock for olefins (e.g. ethylene). From the Gulf News (link above) --
Investment in petrochemical facilities is driven by availability of cheap feedstock and the region's proximity to large markets of Asia such as China and India.

More than 30 million tonnes per year of ethylene capacity will be added in the Middle East by 2012-13, according to London-based Chemical Week.

The new capacity is also likely to put pressure on global petrochemical markets. Steam crackers coming onstream from 2008 in Kuwait, Qatar and Saudi Arabia will cause an imbalance in worldwide supply and demand, lowering petrochemical plant operating rates and leading to a softening in prices, it quoted industry analysts as saying....

General Electric has already capitulated, selling its petrochemicals division to Saudi Basic Industries for $11.6 billion. The Kingdom's future is plastics.

Saudi Arabia is expanding their refining nameplate capacity to 3.6 million barrels per day. It is hard to reconcile such large capital expenditures in a context where the Saudis have diminished expectations about their future oil production. They will not want that expensive capacity sitting idle, nor the petrochemical industry upon which it depends. The Persian Gulf countries are planning for a future where global oil spare capacity stays tight and refining margins remain high. They will increasingly export gasoline and ethylene, not crude oil.

Ferdinand Banks argues2 that "OPEC is in the driver's seat." The paradigm shift strategy optimizes production rates over time, protecting the longevity of the resources while keeping prices high. Banks believes OPEC's best position is one in which non-OPEC supply price elasticities are falling just as OPEC controls a greater and greater market share. This seems to be what is happening. Angola, one of most successful non-OPEC producers, joined the cartel this year, a move which raised their market share about 2.5% all at once. Meanwhile, non-OPEC production is struggling to rise above declines. Lower downstream product costs allow sales at global market prices, a market in which OPEC can expect to exert more and more control over those prices. It looks like a license to print money. Those assets will be used to diversify the economies of the Persian Gulf oil producers.

If non-OPEC oil is on the verge of peaking, and OPEC output is going to be limited for macroeconomic reasons (Saudi Arabia, Kuwait), political reasons (Venezuela), lack of investment (Iran, Venezuela) or disruption (Iraq, Nigeria), then the near term peak of world production is all but assured. If Saudi Arabia can't manage natural declines at Ghawar at this time, and must wait a few years for additional capacity, declines there will merely speed up a liquids peak that appears inevitable in any case. Many in the peak oil community have not paid enough attention to so-called "aboveground" factors. The "paradigm shift" Al-Husseini speaks of is likely to forever change the world oil supply balance.

1. The U.S. Congress provides an amusing sideshow to the argument. They saw fit to pass a bill making it illegal for OPEC to withhold "our" oil & natural gas from the world market (NOPEC). A well-informed colleague voiced his eminently reasonable opinion that Congress is currently living in La La Land. This is not good news.

2. Bank's paper Economic Theory and OPEC is unpublished. Contact the author to arrange to see a copy.

ASPO-USA is a nonpartisan, proactive effort to encourage prudent energy management, constructive community transformation, and cooperative initiatives during an era of depleting petroleum resources.

There's something of a paradox in this whole situation: the only way SA (or anyone else) can hold back is if peak is either here or impending. But if peak is here or impending, then they may not have the capacity to do other than hold back. It is in everyone's (producer's) interest to hold back when oil in the ground grows more valuable by the day -- especially if they can avoid getting bombed or sanctioned.

What's not paraodxical is that peak in the global arena is therefore quite different from regional peaks. There's no place to go for more, causing oil to become more valuable just by sitting there. But this means that the cliff could be much steeper than one would expect from a study of regional peaks.

And from that one therefore deduces amplified efforts at forcible extraction, a deduction that corresponds to what we are actually observing. Along with forcible extraction one also expects to observe attempts to deal with ELM by total destruction of countries that might otherwise be greedily swilling their own oil. Of course, at least one of these has nukes, so that's tricky. Another swiller is already a net importer, but it also has nukes and that's also tricky.

I think that this set of press releases from IEA, EIA and OPEC put together show that Bakhtiari is right when we says that OPEC ceased to exist in 2004.

Today, as opposed to what happened before 2004, all the oil brought to the market will find its buyer. This means that OPEC cannot control anymore the lower bound of oil prices, and this was the major role of the cartel: to prevent prices lowering to a point that would hurt the exporting countries’ economies. The current market tightness rendered OPEC useless.

Will we know what’s going on with Ghawar in the next months? I doubt it. Even if they keep production low in Saudi, we can’t be sure if they’re doing because they can’t do otherwise or if they are simply thinking about the future.

And the traditional argument that "yeah, Opec is a monopoly, but its members will alwawys have a great incentive to cheat" loses its force when its members have so many dollars in their reserves that they dont know what to do with them.

A cheater by definition is a hard-pressed guy (exchanging some dollars today for more hardship tomorrow).
Rich guys cheat less.

A FLY ON THE WALL

So, I got a phone call from my uncle Willie today. Willie is an interesting guy.
Things never seemed to go exactly as planned for him, but still, he was one of those guys who would take an unexpected turn down an all new path, and wind up back on his feet.

Willie had gotten into some ex-wife trouble and needed dough and lots of it. There was no way to make enough to pay back alimony and child support with a normal U.S. job, so he went abroad, and wound up in the Persian Gulf, working for some well connected contractors.

That’s how he came to be in a conference room a few days ago, wiring some telephone gear for an upcoming international conference call of some kind. Willie will be the first to tell you that he is no telecom expert, but he had picked some radio com skills doing radio work on the Kuwaiti border...details best left unsaid, in a prior contracting gig.

So he is doing the wiring in this conference call, when in shuffles about four Arabian VIP’s.
As usual, a mixed bag as far as dress goes, a couple in traditional Arabic garb, headgear and all, and the others in designer business suits, Armani class stuff, with expensive Euro watches of the Breguet class, these were no pikers. They were Sheiks, of the minister and deputy minister class. and they were chatting cordially in Arabic.

As it happens, Willie can speak Arabic, something he learned from a fellow detainee while in Kuwaiti custody having to do with his above mentioned assignment at the border, as we said, the less said the better, but of course, Arabs assume that an Anglo telecom man can only speak English, so they did not restrain their conversation on Willies behalf, and sat down at the end of the long conference table to visit. They had apparently arrived early for the upcoming conference call, and took the time to chat “off the record” as it were. And thus, Willie recounts the nature of the conversation he heard:

Arab 1: “So we come together for another pacifying statement...”
Arab 2: “Yes, we have to tell “the West” what it wants to hear...”
Arab 3: “But what does it want to hear?”
Arab 4: The West only wants to hear one thing: ‘More’.

At this point the first Arab, in a suit and obviously younger than the others, differs:
Arab 1: I think it is not correct to assume the West is monolithic. I don’t think they know what they want to hear. They used to all agree on ‘more’, ‘give us more’, but now, the Greens, the “Hawks’ on defense and balance of trade....who knows...”
Arab 2: Yes, there are those who hate us because we have historically given them more.
Arab 4: Easy talk from the Greens and the Primitives as long as they can drive an air conditioned car to their rallies. They can talk big, but in the end, it’s still “more”.
Arab 2: “And when the day comes we can provide them no more?
Arab 4: They will hate us and distrust us...so what else is new?”
(bitter laughter all around)
Arab 3 (playing the role of the quiet thoughtful one, always asking tough questions): There are those telling them (the West) that we can provide no more...are they being believed?”
Arab 1: Ahhh, the “peakers”, there are some we have met, you know, Mr. Simmons...
Arab 4: And that idiot Persian Bachtairi we know...would you believe them?
Arab 3: Not a fair question, I do not know how they think...
Arab 2: Let them believe as they wish. As I said, those who hate us because we provide much will hate us if we can only provide little.
Arab 3: Besides, it’s a very involved technical argument, is it not? I mean, do we even know, really...?
Arab 2: Know what?
Arab 3: How much oil is still out there, in the deserts, and off the shore. We make projections, but they could be wrong...
(a brief moment of silence as the others seem to be caught off guard)
Arab 2: We have good people, we are doing what we can do....our technical people are now as good as theirs and getting better, that’s what bothers them...they talk “peak”, the Westerners, let them come to the desert and do the day by day studies, let them do the hard work offshore, how likely are they to know?
Arab 3: True, we should know better than the West the real conditions of our oil fields, but that only means we may know slightly sooner what is happening, not exactly what will happen. We know it has been a struggle to maintain against natural decline, has it not?
Arab 4: We are doing better than the British who were so willing to cut our throat with giveaway prices only a couple of decades ago. We are doing better than the Mexicans, who stole our business and wasted away the money. At least we maintained investment to a responsible level. Now the Americans say invest, invest! Why do they now call on us?
Why do they not go calling on their Brit friends, or the Norwegians, or the Mexicans now?
Yes, they run back to the Persian Gulf, where they think it is cheap and easy. Why should we make it cheap and easy? Let them wait for awhile, why should we rush our program?
Arab 3: Friend, you do not accept our responsibility as “reliable supplier”.
(laughter around the table)
Arab 4(snidely): I will put the Arab’s “reliability” as you call it up against our competitors Nigeria and Venezuela anytime....
(all four men break out in loud peals of laughter at a very popular joke at the table)
Once composure is regained...
Arab 3: This is true, and have you seen the Americans or the West able to punish the Nigerians or the South Americans for their lack of “reliability”?
Arab 4: Of course not....have you seen the Europeans able to boycott the Russians for their lack of reliability on natural gas....no, they need them too bad.
Arab 3: They are looking for alternatives though...
Arab 4: Yes, looking. But it has not been easy, has it? And if alternatives are out there, let’s get them out in the open. This is the threat they hold over us, all the way back to the 1980’s...we will go to other suppliers, we will go over to alternatives. Well, let’s make them put the alternatives and the other suppliers out on the table. A high price will bring out the competitors, no one can resist the power of greed.
Arab 2: Yes, exactly. They want us to develop the empty quarter, it’s a helllish world out there, even for Arabs used to it, and then sell the oil for 35 dollar U.S. per barrel! Why should we? The speculators would bid it up and make more on the oil than we would!
But if you don’t, they say, there will be a higher price. But if we do, there will still be high prices, but those of us who made the investment will not reap the reward, some trader in New York will, some GM dealer in Kansas City will! They want us to develop new projects, and charge us maximum markup for the pumps, the pipeline, and then sell the very ones who became rich on developing the fields the oil for nearly nothing!
Would they accept such terms? Does Ingersoll Rand or John Deere offer discounts?
Arab 1: And if Khurais or the Empty Quarter or Arabian offshore fields start delivering big, where will the Americans refine it?
Arab 4: My point exactly. Why should we sell cheap the raw resource to make the refiners rich? We will sell it to them, but in our own time, at our price. If it is such an emergency, let them at least build the refineries.
Arab 2: As I said, we have good people. We will build the refineries if they won’t, but that means we will be using the raw material.
Arab 3: So of course it is easy to see how some would believe we cannot deliver the raw material. We are doing the Aramco developments, but we are not rushing on their whim. We are investing in petrochemical and refinery development, meaning that we cannot give all to raw crude production. We are looking to a use for the same raw material they want, so we are now not only suppliers of crude oil and natural gas, but competitors for it. It’s confusing to the Western customer, would you not agree? And the weakness of the American dollar means that oil looks even more expensive than it in fact is.
Arab 1: True, so for them, it is “peak”, whether it is peak or not....
Arab 3: So is there a danger they would do something foolish?
Arab 2: They already have! Look at this godforsaken mess at our border!
Arab 1: But I think he means something to damage us, correct?
Arab 2: This mess could in Iraq could damage us greatly. They have already created enough danger for us....
Arab 3: True. But they could try to double their bet and make it worse. But what about the other side...could they do something very clever...
Arab 1: Meaning?
Arab 2: You know what he means. Actually pull off one of the alternatives, put it in play, and begin to drop consumption very fast, faster than we can transition. Using their electric power grid to compete, or massive solar that could somehow be applied to transportation.
The ones who hate the wealth we have achieved by Allah’s will and our hard work are asking for this, and have friends in high places.
Arab 3: Yes, it is a possible danger. But we know it will not be easy for them to do. it costs money, takes effort. They must all be in agreement to make it work. Even if they were willing to invest and work, I do not see them coming to agreement fast enough for it to affect us greatly. After all, we will be needing our own oil more anyway. We will have to begin reducing export anyway, unless we can ramp up production. We have a growing population and a growing petro chemical complex that will be oil hungry.
Arab 1: True, and that is what I mean, the outcome for the West is the same, peak or no peak. If we have plenty of oil, we will need some of it ourselves, but more importantly, we have learned not to give it away, we have new customers to bid for it. They will have to pay more. If we, Allah forbid, cannot produce the oil at the old pace and begin to decline, then we will have to use it to develop our petro chemicals, and for our population. The price will go up. Either way, it is peak for our customers.
Arab 3: But of course, we will deliver “diplomatic” talk, to avert possible overreaction by our customers. No need to stir panic when it may not be an issue at all, and since there is not much that can be done about it either way.
Arab 4: So we assume prices will go up, of course, and there will be the unavoidable bumps and drops, as demand destruction sets in, but not fast enough?
Arab 3: Not unless they can surprise rapidly with alternatives, or, of course, the great fear, I don’t even have to say it do I?
Arab 2: Yes. Another North Sea. Somewhere we cannot know about, and they come in the market and cut our throats like the Brits and Norwegians did. And us in debt. This is why they can beg us to overspend on developing oil to “give” to them, we would be fools to do it. Let the price rise high enough to make them find their new North Sea if it is out there, make them deliver it to us as a competitor this time before we destroy ourselves with debt for them, only to be caught off guard. Allah be true, if we know we can deliver 20 million barrels a day, we should dribble it out, force them to show their hand....We are under no obligation to them!
Arab 1: Settle down, friend, we will be in public in a few minutes. Diplomacy! You are right, and true to remember that we have old debts to repay, scores still unsettled. But our day is coming. Now let us go out and play their game....diplomacy!

With that, the Arabs gathered themselves and left the room. And uncle Willie, with his children almost old enough to be off child support, and enough money in the bank drawing interest to pacify his ex-wives, started thinking very hard about getting his visa in order and heading back to Alabama, and shopping for a houseboat on the Tennessee river.

Roger Conner Jr.
Remember, we are only one cubic mile from freedom
and one dose of honesty from home

OPEC 11 peaked in September of 2005. (Leaving out Angola because they were not part of OPEC then and today are not subject to OPEC quotas.) Since then OPEC 11 has dropped 2,015,000 barrels per day from 30.41 mb/d to 28.395 mb/d. Of that 2,015,000 drop here are how much each nation has dropped.

Saudi…......down 1,000,000 bp/d
Nigeria......down 405,000 bp/d
Iran……....down 250,000 bp/d
Kuwait......down 180,000 bp/d
Venezuela down 100,000 bp/d
Indonesia..down 80,000 bp/d
Algeria…....down 20,000 bp/d
Qatar….…..down 10,000 bp/d
Iraq……...…down ZERO bp/d
U.A.E….…..down ZERO bp/d
Libya…..…..UP….10,000 bp.d

Okay, Iraq is not subject to those so-called cuts either. But looking at the other countries we see Saudi has half the total cuts. Nigeria, due to the violence there has almost half of what is left. Iran, I believe is producing flat out. We know Venezuela is producing flat out and Indonesia has been in steep decline for years. Qatar has cut very little but the most telling are the U.A.E. and Libya. The U.A.E. has not cut at all and Libya has actually increased production.

Most of us here, including myself, believe Saudi Arabia has peaked. That leaves only Kuwait that might have any spare capacity at all. And actually I believe Kuwait has also peaked, seeing how they are scrambling to get new technology in an attempt to increase production.

So NO, OPEC is not capable of increasing production unless peace breaks out in Iraq and Nigeria. Fat chance of that happening.

***All the data above is from the EIA, C+C.
http://www.eia.doe.gov/emeu/ipsr/t12.xls

Ron Patterson

Will OPEC increase supply in the 2nd half of 2007? Or has Ghawar peaked?

In American English at least, we tend to use this form to indicate a dichotomy or contradiction (i.e. to assert one or the other is true but not both) without explicitly saying so. But the real truth may be in the closing paragraphs: "Whether Saudi Arabia is able to increase production significantly remains speculation."

It could easily be that both halves of the dichotomy are false - the oil is potentially there for now or even for a considerable time yet, but it will nonetheless be withheld. It's seeming less and less likely that we will ever clearly see the widely discussed 'geological peak' except perhaps at a very, very great distance in Simmons' rear-view mirror. Instead, we seem to be in for an endless succession of 'above-ground factors' - wars, coups d'etat, disinvestment (à la Hugo Chavez), hoarding/husbanding, and so on.

Quite obviously, this situation has been providing abundant material for spin doctors of every stripe, OPEC, doomers, presidents, prime ministers, IEA, and EIA among them...

If you recall oil prices peaked last summer with the Israel-Hezbollah war and the anger over the Iranian nuclear program. Later in the year the price of oil fell below $60 a barrel and OPEC called for 1.7 billion barrels of oil cuts of which an estimated 1.4 billion were actually cut.

Saudi Arabia has been developing megaprojects to replace production lost from declines.

http://www.saudiaramco.com/irj/go/km/docs/SaudiAramcoPublic/AnnualReview...

Am not sure what the status of OPEC production is currently but the EIA country analysis charts have shown most OPEC countries increasing production including Indonesia.

In spite of 1.4 million barrels of OPEC cuts world oil production was up for the first qtr. 2007 over the first qtr. 2006, thus it might be premature to declare a peak at this time.

The peak is coming, but when?

Rembrandt - chart 3 is an interesting one as the trend of rising tops and bottoms seems broken. I don't think "we" ever concluded on how to read stock levels - do high stocks mean a surplus or hoarding in time of shortage?

Eyeballing chart 3 with an oil price chart their seems to be some harmony between the two - are you able to produce a chart of monthly oil prices to set below the stock level chart? A natural link betwen the two woud be the marginal effect of stock draw / build upon demand.

Hey Ron P.

Happy B-Day bro!!!

I don't understand why do christians think that
its written in quran to kill all non muslims.
Can anyone of you please quote that from quran
please? Nobody can because its not written there.
Only at one place its written that if we have a
peace treaty with non muslims we must follow its
terms no matter what and IF THE NON MUSLIMS
BREAK THE PEACE TREATY THEN WE GO AND KILL THEM
WHEREVER WE FIND THEM. It means that if there is
no peace treaty killing of non muslims is not
allowed and is as bad a crime as killing a
muslim, unless in war and even then only those
non muslims who are soldiers AND fighting
against us. If there is a peace treaty and
non muslims not break it then we can't break it
either in any case and no matter how hard the
conditions of peace treaty are we have to follow
it. If a peace treaty happen and non muslims
break it then we have the right to fight and
kill them, but even then not all of them but
only those who are soldiers AND fighting against
us. Non soldiers and those soldiers who are not
fighting against us can't be killed even in
middle of a battlefield. We are very careful
about it and all our history tell this.
Otherwise during late middle ages, time between
1400 and 1700 we (specially ottoman khilafat)
was strong enough to wipe out all but a few
hundred christians living in forests of Goth.

About 9/11 it was not a muslim act, if anybody
here requests i can send a pdf showing the
details and about a hundred proofs that we not
done it. All those proofs are from your media,
your leaders and your reports not ours.

Its a very sad thing to see a dumb head
hijacking this very useful informative site into
a place to blame other religions things that it
never says. Its shows the mental state of that
person and disqualify every other thing he say
cause its proven he is saying it without any
proof or base.